November 19, 2019
In 1958, Forbes Travel Guide was founded by Mobil—yes, like the gas stations—then called the Mobil Travel Guide becoming the first of its kind. While the novelty guide was intended to promote road trips among American consumers, the guide also established a 5 star standard for hotels–essential for all travelers–and provided a rating to those that met their standards. By trademarking their 5 star rating criterion along with its phrases and designs, Mobile successfully established a private rating agency for hotels, restaurants, & spas. And with this innovation, the landscape of American travel was sure to change even more.
Since 1958, short-term accommodations have drastically transformed in both the United States and abroad. From the traditional New England-style bed and breakfasts to the newest tech-savvy hotels, there are a multitude of alternatives for the modern day traveler. However, ample choices don’t necessarily make selecting an accommodation any easier. Historically, the 5 star rating system has provided a framework for travelers to select a hotel that suits their preferences. Although the star rating system has served to guide travelers, the system has been unable to service the varying travelers who have defined their own set of standards.
Forbes Travel Guide illuminates their goal explicitly on their website: “We Verify Luxury”. The hotel classification standard focuses on the amenities and services provided at the property. More importantly, it is Forbes Travel Guide that established the standard for a “Luxury Hotel”, not the consumer. Ratings are done by physical inspections, limiting the bandwidth of the entity to encompass a sizable sample size of hotels from around the globe. Using a checklist of services and amenities that is updated annually, Forbes inspects around 1,000 hotels a year. That means that there are very few hotels that have verified star ratings from Forbes itself.
Attempts have been made to unify a global rating system/agency to create synergy within a worldwide industry. Unfortunately, none have been able to conquer this venture. However, the swelling of confusion and distrust has been mounting over this very issue for some time. Coupled with a new age consumer and a thriving and growing digital economy, a 5 star rating has never been so distasteful.
DECENTRALIZATION OF RATINGS
The dilution of the hotel star rating comes as no surprise to professionals throughout the industry. More importantly, the inconsistency and confusion has contributed to the problematic nature of the star ratings system itself. Unfortunately, unifying a global hotel rating standard, is quite a feat. Internationally, there are several entities that have established their own hotel classification systems. HOTREC is a european association that has about 20 countries, and the UK has its own called AA. Making matters even more bewildering to the consumer, is the fact that most consumers use online booking sites to source their travel arrangements. These websites, featuring properties across the globe, must translate these classifications to their pages, inevitably creating an additional layer of sentiments and inaccuracies.
Just over ten years ago, Travel Weekly published an article articulating the “inconsistency and confusion” that had aroused from a hotels’ self-proclamation of their star classification. This was not an isolated incident, rather, it was an anecdote displaying the flaws of the system. One of these flaws, reflected in the anecdote, is that there is no global regulating body overseeing and enforcing star classifications for hotels. Given the star rating of a hotel has any contribution to the revenue of that property, begs the question of why we have a rating system that is not enforced or regulated? A Star rating can impact the ADR of a property, it can also determine how a hospitality group will decide to engage in new construction or upgrading amenities and services, etc.
Over the past two decades, there has been an influx in the utilization, distribution, and analysis of online reviews. This has followed a larger trend of online consumers and marketplaces that extends beyond just the accommodations industry. Amazon.com is a prime example of the ultimate online consumer marketplace powered by consumer reviews. Among all the confusion, consumers have adapted to performing their own due diligence within the digital marketplace. Interpreting human sentiments and reviews to inform ourselves has become commonplace. Technology companies like ours at Vindow, recognize these trends and have implemented alternative solutions for our clients by providing a proprietary rating system to assist their procurement process.
“Among all the confusion, consumers have adapted to performing their own due diligence within the digital marketplace. Interpreting human sentiments and reviews to inform ourselves has become commonplace.”
Given the landscape of the rating system for hotels, it further incentives hotels & online travel sites alike to either artificially increase revenue of a property by distorting their star rating. With any distrust in a system, leads to consumers searching for alternative solutions. In this case, in comes in the form of online reviews.
A SHIFTING PARADIGM: FROM STAR RATINGS TO HUMAN REVIEWS
The proliferation of the fragmented rating systems is rooted in the shifting landscape of short-term accommodations and consumer behavior. With the advent of short-term non-hotel accommodations, bolstered by companies such as Airbnb and booking.com, consumers have little choice but to explore and analyze reviews before making a decision. Needless to say, star ratings are absent from these types of accommodations. Star ratings are tailored to a business or luxury traveler, which inherently disregards a large segment of consumers booking accommodations across the globe. Thus, it appears that Forbes’ star ratings speak to a specific type of traveler. One that closely or entirely adheres to their set of standards for a property.
Today more than ever, a consumer can personalize their preferences. From the languages spoken by the staff to the thread count of the pillows, anybody has the ability to set their own standards. What one traveler considers to be a 5 star hotel can dramatically vary from person to person. What the 5 star rating cannot gather from their evaluation, is the experience that each traveler will have when staying at their accommodation. A star rating cannot be applied to the masses, and for the longest time, the number of stars was the best indicator of hotel quality and services. Now, consumers can tailor their preferences and aggregate human sentiments through reading reviews to get the best accommodation for them within their budget. That is is the shifting paradigm that we are seeing today. The trust has fallen back into the lap of the people. Created by the people, for the people.
The paradigm shift of review-based decision-making is rapid and pervasive. In the digital age, humans have taken matters into their own hands. In both ways, the consumer is responsible for sharing their experience with the public (in the form of online reviews) and utilizing these reviews to empower their next purchase with confidence and knowledge.
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